Software and services providers set out stalls for 2010

Newsroom 15/02/2010 | 11:15

Total IT spending in 2009, including hardware, software, IT services, personnel and miscellaneous expenses, amounted to approximately EUR 1.8 billion, 15 percent less than in 2008. Of this sum, the hardware market made up approximately EUR 610 million, while software and services sales represented about EUR 640 million, according to data from Pierre Audoin Consultants (PAC). Despite having emerged stronger than the hardware market, software and services still slumped by approximately 12 percent in 2009.

By Otilia Haraga


Projects that suffered the most involved the implementation of new business solutions such as CRM (customer relationship management) and ERP (enterprise resource planning). The fields that best ‘survived’ the crisis were infrastructure services, including the outsourcing of desktops, printers and so on, Eugen Schwab-Chesaru, partner and managing director of Pierre Audoin Consultants (PAC), tells Business Review. He cites outsourcing as one sector that will have “a strongly positive trend.” Players generally focused on the near future and abstained from making investments with a long-term ROI, he said.

“If we look at our sales in 2009, the most requested software products – and inherent services connected to their implementation – were in back-up and storage at all levels: small, medium and enterprise,” Eduard Dimitriev Gradinescu, general manager of PowerNet Consulting, tells Business Review. He adds there was also a slight shift towards security and virtualization systems, “but these are just in the project stage that can reach finality in 2010.” PowerNet Consulting saw a decline in software and services, which now amounted to 20 percent of the turnover, while the year before this domain had made up 33 percent. For this year, “pundits mostly foresee a revival in ERP,” says Dimitriev Gradinescu.

“The economic crisis in 2009 placed a major obstacle before companies: great caution regarding investments in IT infrastructure,” says Liviu Dan Dragan, general manager of TotalSoft. “Our strategy was to follow the general trend on the market and come up with various cost-control and debt-collection solutions.” These included eProcurement, Expenses Control and Collection. “We think these solutions will continue to be in demand. We also expect a slight re-invigoration of demand for more complex software services such as ERP, as well as the resumption of projects in the public sector,” predict the company officials.

A decline in software and services was to be expected, however. “I believe that 2010 will bring an increase of around 10 percent, somewhere up to EUR 100 million, but this will be due mainly to the private sector since the state does not yet believe that the administration needs software. However, once the foreseen lay-offs in the administration take place, an integrated software system, especially of the ERP type, will be needed. At the moment, I think not even 5 percent of the state institutions use something like this,” says Dimitriev Gradinescu.

The public sector is crucial for the IT market in 2010, according to Schwab-Chesaru, since the growth in the public sector will influence decisively the evolution of the market and most players will participate in public projects to make up for the pressure on prices and the delays suffered by projects in the private sector. “However, it seems there are big problems in launching large projects in a transparent manner in the public sector,” he adds.

As a rule, the first few months of the year are rather lean for public bids. “Few projects have been launched this year but we expect the situation to pick up from the second quarter,” says Dragan, adding that it is still too early to make any predictions. Recently, the Ministry of Justice expressed its intention to organize a public bid to acquire an IT system that will allow it to record court sessions, and the company means to enter the race. “We expect the public sector to generate approximately 20 percent of TotalSoft revenues,” he adds. The company’s turnover in 2009 amounted to nearly EUR 20 million while this year officials forecast a turnover of EUR 24 million.

Last year, it was only towards the end of August that public bids started to appear. “I am under the impression – and here Gabriel Biris [ed. note: managing partner of Biris/Goran] confirmed it for me – that there is some kind of government policy to keep all investments under lock in the first half of the year to see what money the state receives. Depending on how much is raised, the funds from the budget forecast will be released. The aim is to keep tabs on inflation and other indicators. This proves a total lack of strategy and is not at all beneficial for us as no matter what estimations we make, they will be turned upside down. I don’t think the government’s policy regarding public projects will change in 2010,” says Dimitriev Gradinescu.

While last year PowerNet Consulting cashed in 60 percent of its revenues from the public coffers, this year the company has changed strategy and will focus more on the private sector, where its target for 2010 is to up sales to 60 percent of the turnover, with only 40 percent coming from the public sector. For 2010, PowerNet Consulting expects on a turnover of EUR 17-18 million.

BR Magazine | Latest Issue

Download PDF: Business Review Magazine June II 2024 Issue

The June II 2024 issue of Business Review Magazine is now available in digital format, featuring the main cover story titled “Mihaela Bitu, ING Bank Romania: Banking makes dreams come true”. To
Newsroom | 28/06/2024 | 12:25
Advertisement Advertisement
Close ×

We use cookies for keeping our website reliable and secure, personalising content and ads, providing social media features and to analyse how our website is used.

Accept & continue